PHARR, Texas (ValleyCentral) — Saturday’s assassination attempt on Former President Donald Trump made a strange new impact on the U.S. economy, as stocks have increased since the incident.
This boosted the Dow Jones average by half a percentage point, going against historical records. President Ronald Reagan’s assassination attempt plunged the Dow to 1.4% and the death of President Kennedy to 2.9%.
The University of Texas Rio Grande Valley Finance Professor, Siamak Javadi explains the difference came about because of the instant media coverage.
“The news got out almost immediately, so there was no uncertainty around that.”
This sparked confidence in the stock market, according to local tax agent Ascencion Guzman. He explains the thought process of people investing after the shooting.
“This is a businessman; he just came out on the news. Something extreme happened to this guy. What stocks does he have? And usually, that’s how people think.”
The boost comes in large part from Trump-affiliated businesses. Javadi says this turns into long-term trust towards a Trump campaign.
“Market reflects future expectation, and then people believe that President Trump is going to get re-elected, and he is going to do well with the economies, so it kind of follows that the market should react positively.”
Guzman adds that these also reward those who invested before the shooting, with long-term investments like 401(k)s.
He added that he talked to a client earlier about his investments in cryptocurrency, which rose 4%.
“I texted him and told him “Hey bro, check your crypto!” and he was all excited. He was like- he was just, you know- oh my!”
Javadi warns to not invest too much in the short term, despite the boost.
“Take it with a grain of salt. I always tell my students do not look at these short term volatility in the market, especially if you’re holding a 401(k). Your investment horizon is very long.”
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